“WAR OF THE WORLDS” WARNING: None of the facts stated in this article have yet come to pass, nor may they ever come to pass. All information contained herein is speculative, so rest assured that the Walt Disney Company and Comcast HAVE NOT merged as of yet.

Heh…heh…heh… Why do I all of a sudden fell like Chernabog? You know, Chernabog, from Fantasia:

Okay, okay, I know that was a really cheap way to get my favorite Disney Villain some screen time, but such are the perks of being an editorial columnist. :o)

Seriously though, what is it about being bad that makes us love villains so much, and why am I really excited about doing this article? Maybe it’s some inert gratification from not being good all of the time, or maybe it’s some desire to break with the status quo. Better yet, it sounds more like another topic for another day.

For now it’s time to try and wreck a possible combined Disney and Comcast in the best way that I can. I’m doing this so that by putting down such a scenario on paper, we may all get a glimpse of what could happen, and maybe just maybe those with some influence may heed this example as a warning. Hopefully, we will never have to see anything like this.

Like last week, this week will be done in a chart format, since that worked so well in understanding the makeup of a combined company. If you haven’t seen the “best case scenario” from last week’s article, stop here and go read part three over before continuing here. Its okay, we’ll wait for you.

…and…wait…for…the…click…Okay, now that those people are gone, let’s get to the good stuff, shall we?

As you can see, Comcast basically kept what they wanted (which basically included ABC, the two non-Disney branded movie studios, and cable assets), and sold off everything else. The only exception to this would be the Comcast Leased Holdings, which includes the rights to all of the old Disney Characters. It should be pointed out that I kept the same names from last week’s diagram for simplicity, including those I created on my own. I did not include Jim Henson Productions or Pixar, since in this scenario Comcast would have just sold them off after purchasing them. The exception to this would be the Muppet characters, since the Walt Disney Company would have already bought them by this point. All sales include the products already made in the past under those assets, and the right to the use of the names “Walt Disney” and “Disney” in the bought asset’s business lines.

I gave Walt Disney Feature Animation and Buena Vista Home Products to DreamWorks SKG, since they are Disney’s primary competition in this realm. I thought they would keep the two together in order to have the ability to have the films released for home viewing afterward.

Walt Disney Pictures went to Paramount, or rather their parent Company Viacom. This was done due to their attempt to counter such Disney films as The Lizzie McGuire Movie and The Princess Diaries with their own such as Mean Girls and The Prince and Me.

As would be expected, Vivendi Universal bought up the most Disney assets thanks to a large sell off-induced cash flow. This resulted in them claiming Walt Disney Television Animation and Walt Disney Television for their cable assets such as Nickelodeon, and the Walt Disney World Resort (and most of the hotels) to completely dominate the Orlando Tourism market. All ownership holding in overseas Disney parks were also acquired by Vivendi Universal. The DisneyQuest concept and facilities were purchased as well, in order to boost and possibly expand their wholly-owned GameWorks Family Entertainment Center company.

Donald Trump, being the savvy real estate tycoon that he is, had his Company completely wipe up all assets in New York City which included Walt Disney Theatre Productions. This would exclude those locations owned by ABC and other Comcast held Disney assets. Not only is the location great, but he would have additional attractions for his resort guests.

Anheuser-Busch, after losing the bidding war with Vivendi Universal for the Walt Disney World Resort, ended up owning the Disneyland Resort in California, excluding Disney’s California Adventure. This was done to allow the Company to own a part of the Disney parks, and to settle a very old score about alcohol not being served in Disney Parks: visitors could now have a Bud while walking down Main Street.

Six Flags managed to steal California Adventure away from Anheuser-Busch, emphasizing to Comcast an ability to better manage such “off the shelf” rides that are found in the park coupled with a plan for more roller coasters and thrill attractions to be located in the park. Given that they also offered a percentage of total sales to Comcast for the deal, the Disneyland Resort was split up.

In an expected move, Carnival bought up the Disney Cruise Line, of which their two ships complement their other brands nicely. Plans are made and presented to build 10 more ships in the line, while reducing prices and possibly some amenities for future sailings. The two existing ships will continue to be located at Port Canaveral, but may be moved at a later date to Carnival’s home Port of Miami.

To increase their presence in the Time Share market, Marriott International chose to buy up all of the Disney Vacation Club assets, and possibly merge them with their Marriott Vacation Club. The All Star Resorts were purchased as well, and negotiations are pending with Vivendi Universal to operate all hotels on Walt Disney World property. If necessary, agreement will be made with Universal regarding the Universal Orlando resorts to be pulled from Loews management and given to Marriott as well.

Sally Industries is an attractions & special effects manufacturer, specializing in things like theming and Animatronics. The remnants of the Imagineering group, including employees, intellectual and physical assets, were bought up for use in current and future projects. Maintenance & development contracts are being sought with Vivendi Universal, Anheuser-Busch, and Six Flags for the attractions in the old Disney parks.

Trying to capitalize on Disney Store’s increased presence of clothing, Gap bought the chain and plans to use the brand name to introduce higher-end priced clothing to the family segment, while focusing on exploiting the Disney character usage in new products.

Sony, trying to increase product offerings in its music and video game segments, bought Walt Disney Consumer Products and Walt Disney Records. This will allow all Disney Characters to be featured in games only on the Sony platforms such as Playstation 2 and PSX, while stopping production on titles currently on or being developed for platforms such as Nintendo Game Cube or Nintendo Game Boy Advance SP. Other consumer products, such as toys, will be leased to other companies in those business lines.

Last but not least, Yahoo!, feeling the pressure from the more popular Google search engine web site, bought the Walt Disney Internet Group to dominate the family internet segment. Contracts for web site hosting, management, and domain name access are being sought with all of the above companies and their recently acquired Disney assets.

With all of the sales, I assumed that each came with the rights to its old products. This can lead to a very complicated situation since the product isn’t always exclusive to the brand. For example, in the case of DreamWorks SKG, they would have the rights to the Alice in Wonderland Theatrical Film and the home sales (DVD & VHS), but not to the Alice in Wonderland ride at the parks (now owned by Vivendi Universal and Anheuser-Busch), music or video games related to the film (now owned by Sony), merchandise (now sold by Gap), or the characters themselves (which are now leased from Comcast). In other words, if they wanted to do more than was already done in regards to Alice in Wonderland, they could produce a theatrical film or home video product with Comcast’s permission and royalties paid, but not much else. By the same token, the other companies just mentioned could produce products in their acquired asset’s business, but not anything else outside that business line, and again would have to pay royalties to Comcast for any additional character use.

The Walt Disney Company gets completely diced up, and all of the assets get to retain the “Walt Disney” or “Disney” name. You end up with more than 12 different companies using the same brands, which lead to their utter dilution. Who’s to say what one does with the section of the “Disney” name or character line would be appropriate to the others? One thing is for sure: unless Comcast placed a clause in all of the sales contracts as to them being the deciding party amongst disputes, there would be plenty of lawsuits. Chances are, Comcast would want to first approve any use of characters in order to keep the value of their leased assets high.

So where does all of this leave us? I mean sure, the above looks pretty bad for the Walt Disney Company, but would that happen in reality? Could it happen: sure. Will it happen: I sure hope not. A better question would be to ask if the result of a possible bid for the Walt Disney Company would land somewhere in the middle of the “best case scenario” of last week and the “worst case scenario” of this week.

With that question, I must honestly say it’s up to you to decide. While I may have an idea for what the combined Disney and Comcast may look like in a best and worst case scenario, it is you who will ultimately decide what happens, if anything happens at all. I encourage you to make you voice heard, since after all, none of this would be, or was ever, possible without your support. Disney would just be another last name to the world if no one ever cared.

If you are a shareholder, write your board members with your opinions, and if the chance ever comes, vote your shares for or against the sale of your shares to Comcast. Don’t ever let a board choose your vote for you based on your inaction.

That about wraps it up for The Comcast Factor series. Thanks for stopping on by, and I’ll see you next week!